140 Exchange Invest Weekly Podcast April 23rd, 2022

Transcript:

This week in the parish of bourses and market structure:

Big upheaval in the Middle East as Qatar Stock Exchange buys LSEG technology. The US government drought may be leading to a water ban? Nigerian Derivatives are a Go-Go on NGX while we mourn the passing of an ace parishioner.

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 140.

Good day ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the week in market structure. All the analysis of the week’s many events and happenings can be found in Exchange Invest’s daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox.

More details at ExchangeInvest.com.

The outgoing London Metals Exchange (LME) Chief Executive Officer Matthew Chamberlain has called for scrutiny of private deals in the nickel probes that are ongoing. The blind spot and over-the-counter markets were meant to have been resolved by reforms after the global financial crisis of 2007-2009, noted Philip Stafford in the Financial Times.

Is that a storm in a Nickel cup ladies and gentlemen or OTC Swaps risk 2.0?

It does appear perturbing that “The issue is further compounded (according to the Financial Times) because although it opens for the morning in Asia, LME’s clearinghouse typically does not ask for intraday margin calls until the market has opened at 8 am London time.”

Over an India, Domestic Gold Spot Exchange is facing a tax hurdle. That means they’re unlikely to start operations in the near term due to a big fat VAT problem, which is threatening to delay if not entirely derail the concept of Indian Gold exchanges.

Intercontinental Exchange (ICE) they’re partnering with McLaren racing. They’re going to have an amplified focus on sustainability and diversity along with of course speed. Readers may recall a NYSE sponsored Marco Andretti being overtaken on the last lap of the 90th Indy 500 in 2006. Now, NYSE owner ICE is sponsoring the Extreme E team of McLaren, whose racing boss Zack Brown is a star of the recent ICE TV commercial.

In the Middle East, Abu Dhabi Exchange (ADX), they’ve unveiled a rebranded $17 billion growth market in a push for private sector listings. The Colombo Stock Exchange, they’ve been defending the fact that they’ve remained shut for 5 days as Sri Lanka struggled to combat its Forex crisis.

In the UK, the ramifications of Russia’s invasion of Ukraine continue to pile up the problems for the Moscow Exchange Group. MOEX has had its status as the UK recognized stock exchange revoked in as the telegraph described it, the latest sign of Russia’s isolation from the global financial system.

Singapore Exchange they’re due to start ops at GIFT City in the very near future. At the same time, the Singaporean High Commissioner Simon Wong has noted it’s “hard” for Singaporeans to live in GIFT city as “it is quite a ghost town” in his own words, after working hours. The High Commissioner also notes the “bylaws are very tough” and it is “difficult to build a financial centre”. Will we see a Guinness brewery in GIFT city to liven things up? Oh, yes, the simple problem is in the bylaws.

Brexit news this week: cutting European Union reliance on UK clearers is like ending the use of Russian energy, said the EU commissioner. EU Commissioner McGuinness went on to say “It’s time now for Europe, the EU of 27 to make very strong decisions on the financial stability and the financial system, just as we are doing today, very critically and very urgently around our over-dependence on energy from Russia”

Well, let’s leave aside for a second. The fact that actually, Germany is doing nothing about its energy reliance on Russia and France is trying very very hard to make Ukraine sue for peace. The point is that the European Commissioner McGuinness has lived up to her mad Mairead moniker with what amounts to a quintessentially bonkers, not to mention utterly tasteless remark, which shows the EU seas hostiles on both its western and eastern fronts. These utterly crass remarks perfectly surmise the insanity of Brussels right now, a bureaucracy driven loopy by Brexit behaving like a sad caricature of a deranged vengeful divorcee. In making such marks Commissioner McGuinness brings shame on the European Union and demonstrates she is clearly unfit for office.

New Market news this week: the Romanian Commodity Exchange has online say finally good grief, it’s been more than a decade of discussions, granted a licence to operate as a wholesale electricity market operator.

Meanwhile, in Australia, there’s an interesting new private trading venue launching. FinClear has announced its unlisted liquidity venue FCX. Commodity exchange need of the hour said the Daily Star in Bangladesh, upon news that such a market may be appearing in the near future. And meanwhile, the big news of the week Nigerian Exchange (NGX) they’ve launched West Africa’s first Exchange Traded Derivatives (ETD) market. Good luck to them with their Equity Index Futures Contracts debuting on this brand new exchange.

While Chittagong Stock Exchange has signed its deal with the Multi Commodity Exchange of India Ltd (MCX) to build that all-important Bangladesh Commodity Exchange. Over in East Africa, Comesa or Mulls Agric Commodity Exchange as well. The 21-member Common Market for Eastern and Southern Africa (Comesa) intends to set up an agricultural commodity exchange centre that will link and improve smallholder farms and smallholder farmers’ access to markets.

Meanwhile, whatever state of lockdown you may be in, wherever in the world you are, perhaps you can even manage to be one of the lucky few who can get on an airplane and get on an airplane even without having to wear a mask. We all know that COVID-19 has been a killer however, can it kill your career? Or was that the impact of FinTech destroying your business?

It’s a “Victory or Death?” world of risk and opportunity to understand how technology is affecting life and markets. There’s my book to help you, 20 years on from the excitement of the original FinTech best-seller “Capital Market Revolution!” It’s time to look at some of those loose strands hanging around which need a spot of perspective, whether you are an exchange parishioner, a FinTech professional, or somebody just trying to stay abreast of where technology is now driving investments and finance. “Victory or Death?: Blockchain, Cryptocurrency and the FinTech World” by myself, Patrick L. Young, published by DV books and is distributed by Ingram worldwide.

Meanwhile, while you’re waiting for your copy of “Victory or Death?” to arrive, check out our Livestream, that’s on Tuesdays at 6 pm in London time, 1 pm New York time, the IPO video live show. Catch the back episodes on YouTube via IPO-Vid. Last week, we had a sensational show with Patrick M. Young talking to myself Patrick L. Young about his life and how he is trying to make a difference in society through helping men, essentially former felons get back into society and indeed, not merely dress the part but understand the finances they need to make a success of life. It was a humbling discussion and one where there are many possibilities for us all to progress in society.

Coming this week, “From SMEs to Cannabis Power Player”, our guest is Richard Carleton, the Chief Executive of the Canadian Securities Exchange. Catch that on Tuesday at 6 pm, London time.

In crypto land: we pass The First Anniversary of Coinbase and indeed a year after the crypto exchange went public, its shares have fallen 40%. But then, of course, ladies and gentlemen, we told you so at the time in Exchange Invest issues EI 2024, EI 2025 and EI 2026 to be precise, in fact, we even made it entirely free. You could have read our article on CapX: Is Coinbase the future – or a digital South Sea Bubble?

Product news this week: the CME is going to launch Monday and Wednesday Gold, Silver and Copper weekly options that will start on May 2. Meanwhile, on April 25th CME Group and CF benchmarks are going to launch 11 new cryptocurrency reference rates and real-time indices.

Elsewhere new national derivative products from CBOE Europe building out now to a series of indexes of leading markets across the European Union.

Technology news this week: the Tokyo Stock Exchange’s plans include a new trading system by October 2024. Q vendor mania me thinks.

Speaking of vendor mania, there must be a certain degree of relief satisfaction and general all-around happiness at LSEG. London Stock Exchange Group’s technology arm are providing the new trading and clearing platform for the Qatar Stock Exchange.

Delighted to see this announcement made (at last – it’s been tacitly known on the street for some time). It marks an excellent first installation for Peter Jessup’s era as Head of Market Infrastructure Business Development, Trading and Banking Solutions at LSEG.

The LSEG system replaces Euronext which supplied the QSE for over a decade while the new LSEG system will power the Qatar Exchange across cash and its new upcoming derivatives markets including the CCP software, at least now that QIA which owns 7.59% of LSEG is more in alignment with QSE (whose Vice Chairman is also the QIA’s CEO) where Q Investment Authority is a significant investor.

Final news in technology this week: the Nairobi Securities Exchange they are going to invest an Sh200 million in a trading platform upgrade $1.75 million is going to be invested in the Kenyan Exchanges trading technology.

Crowd Funding news this week Crowdcube is bringing its equity crowdfunding platform to France. And in Hong Kong crowdfunding platforms are going to be regulated so they do not endanger national security, according to a leading regulator in the SAR of China. Interesting of course, because don’t forget Hong Kong still has a legislative monopoly on its stock market.

Regulation news this week: Gary Gensler has been reflecting on his first year as SEC chair. Many may say it’s been frankly a disappointing year – too many initiatives, a lot of hyperactivity and relatively few results given the headlines garnered. With the Biden Presidency looking like an utterly lost cause as mid-term defeat likely looms, it seems to be challenging, discerning just what Gary Gensler can actually achieve?

Over in Australia, ASIC’s CFD product intervention order has been extended for 5 years.

That’s going to remove a lot of leverage for retail investors. Meanwhile, over in California, progressives want to ban the trading of California Water Futures. This frankly sounds like a welcome to the valley of the mad. If this were Indian politics, we would ridicule it for it to be in the USA demonstrates the way the once coherent Democrat party has lost its mind within a generation from Bill Clinton, who was still capable of doing politics as opposed to the growing dictatorship of the smugly incompetent, which has prevailed on the leftward lurch of the Democrats ever since.

Of course, CME are highly culpable here for allowing this to get out of hand as passive monopolist milking assets while failing to steward their prevailing portfolio proactively. Exchange Invest argued tirelessly that the loop folk were ludicrously passive as the loony left of American politics worked up a head of steam against what is the most quintessentially sensible of products, one where risk transfer can be effected easily, and standards raised through market mechanisms. Tragically, the US is in danger of suffering the Euro-delusion of losing touch with the benefit of free markets and economic growth they deliver, through higher standards and better products that’s from the markets not the regulations.

In career paths: this week news was dominated after Easter by the demise of well, he was described in the Exchange Invest 1000 Volume 01 as “One of the most influential technologists/managers behind the scenes in the industry across the world and the full technology stack.” RIP Brian Taylor. I know I was not alone in feeling entirely shocked to hear of his demise.

Relatively speaking, there are, I am sorry to say, precious few parishioners with a genuine passion for making markets – and making better markets at that. Brian was staunchly in the latter camp – driven to improve the world one bourse at a time. He fulfilled more than 120 client mandates in almost as many countries across the world. It was a glittering career building one of the first modern CSDs (Malaysia in 1985) and creating, operating and advising a multiplicity of exchanges and market infrastructures across the world from the Bahamas to Ukraine, through Lanka to Saudi Arabia and far beyond. Indeed, Brian worked across all continents, often on behalf of a multiplicity of multinational banks, including the World Bank, EBRD, EIB, EU OJEC and US AID.

Brian retained a great passion for building markets of all sizes – right down to the very small. He had done great work with Gibraltar Stock Exchange, and indeed, a decade ago was trying to get the Welsh Stock Exchange off the ground when it appeared there might be a regional renaissance of exchanges across the United Kingdom. Brian was an experienced C-Suiter running Plus Markets in London amongst many other ventures.

In his own – quintessentially correct words – “Brian is renowned for solving complex problems that others cannot resolve and we have delivered major projects where “big name” advisors have failed. Brian is extremely professional and honest, providing totally objective and analytical advice.”

I always had valued Brian’s counsel and admired the fact that he did not adhere to the tawdry practice of supporting other advisors no matter how useless, feckless or linear their ability to perform, often with a blind disregard to actually resolving the client project. Far from it, Brian’s focus was results and delivering the best result in a sensible timescale at all times.

We have lost a great bourse builder. Vale Brian Taylor, market maven, exchange guru, gentleman. Our condolences to his wife, Helen.

In other sad news this week, we learned of the death of the former President of the Omaha Grain Exchange and the Minneapolis Grain Exchange Merlin W. Mills RIP.

One piece of good news to end the week in the world of career moves. Congratulations to both the Bermuda Stock Exchange and Ailish Byrne. Ailish, formerly in a senior management role with the Irish Stock Exchange and then briefly with Euronext after they took over, has become the Chief Compliance Officer designate of the Bermuda Stock Exchange. All the very, very best to Ailish and indeed, all the best in retirement to Jim’s McKirdy.

Meanwhile, in a world which has been upended by the Russian invasion of Ukraine, perhaps the most exciting energy news of the last week or so – was the theme of resurrection. While useful Putinist idiots of privilege continue to run idiotic a green extreme protests across the UK and beyond BoJo with the British Prime Minister, the embattled British Prime Minister, has actually finally resolved to give the UK a chance to revive onshore gas as the UK seeks finally to frack for freedom!

And on that mysterious and magnificent note, ladies and gentlemen, my name is Patrick L. Young. I will be back with Exchange Invest daily newsletter every day of the week. Ping us via social media or on email if you would like a free trial, and I wish you all a very, very happy and productive week in life, blockchain and markets.

LINKS:

LME Chief Calls For Scrutiny Of Private Deals In Nickel Probes
Financial Times

Domestic Gold Spot Exchanges Face Tax Hurdle, Unlikely To Start Ops
Business Standard News

Intercontinental Exchange And McLaren Racing Launch New Partnership With Amplified Focus On Sustainability And Diversity
ICE

ADX Unveils Rebranded $17bn Growth Market In Push For Private Sector Listings
Arab News

Colombo Stock Exchange To Remain Shut For 5 Days As Sri Lanka Struggles To Combat Forex Crisis
LankaWeb

UK Targets Moscow Bourse To Try To Curb Investments In Russia
Reuters

SGX Due To Start Ops At GIFT City, Singapore Envoy Says A ‘Ghost Town’ After Work Hours
Indian Express

Cutting EU Reliance On UK Clearers Like Ending Use Of Russian Energy, Says Commissioner
Reuters

EU Finance Chief Compares Access To The City With Dependence On Russian Gas
Telegraph

The Romanian Commodity Exchange Has Been Granted A License To Operate As A Wholesale Electricity Market Operator
ACTMedia

FinClear Announces Unlisted Liquidity Venue: FCX
FinClear